Sprint exec messages suggest T-Mobile deal may increase prices

Marcelo Claure John J. Legere sitting at a table

On a cold and rainy Monday morning in NY, T-Mobile and Sprint went to court to try to get approval for their merger.

"Legal experts say it is unprecedented for the states to reject such a settlement and sue to block a merger of this size and national scope without the support or involvement of federal authorities". In a lawsuit, the lawyers argued that T-Mobile and Sprint should not be combined, "based on the hope that Dish will one day become a viable mobile phone company that will be equivalent to a competitor that already exists today".

The second argument of T-Mobile, Sprint duo will be that wireless companies are switching to 5G from 4G LTE and that will lead to significantly higher speeds for consumers.

If the states win their case, other companies may attempt to merge with or acquire T-Mobile or Sprint, according to sources in a CNBC report.

Attorneys for the 13 states and the District of Columbia, led by NY and California, are seeking to prove in Manhattan federal court that a plan to combine the No. 3 and No. 4 wireless carriers would push up prices, particularly for users of prepaid plans.

"And they DO NOT pay anything for this", Sole wrote to Claure.

That trial was scheduled to begin early Monday in U.S. District Court for the Southern District of NY, where attorneys general for the 13 states and the District of Columbia were to argue against the $26.5 billion deal that would see the third- and fourth-largest telecoms companies combine. T-Mobile's MetroPCS prepaid model instantly pared prices on its plans. The New York Post cited sources who said the Dish agreement to offer cellular service to 70% of the country by 2023 or make a $2.2 billion "contribution" to the U.S. Treasury is voluntary. "Competition between the mobile companies has resulted in better coverage and cheaper, more reliable service for all of us", said Massachusetts Attorney General Maura Healey, when the suit was filed in June.

The deal had been contemplated in 2014 during the Obama administration, but the Justice Department and Federal Communications Commission urged the companies to drop it, which they did.

T-Mobile defends its deal as good for competition.

That condition is to be met by the sale of Sprint's prepaid business and spectrum assets to Dish Network Inc.

"We plan to build one of the world's most advanced 5G networks, which will massively revolutionize the way consumers and businesses use their connected devices to enhance their daily lives", Claure added. "Our airwaves belong to the public, who are entitled to more, not less". Sprint's network quality is worse than that of its competitors, and it has lost customers, which limits its ability to invest in network enhancements.

Several T-Mobile, Sprint and Dish executives are expected to appear in the coming days, including T-Mobile CEO John Legere, President and Chief Operating Officer Mike Sievert and Chief Technology Officer Neville Ray.

Tim Hoettges, the chairman of T-Mobile's majority owner, Deutsche Telekom AG, began testifying Monday and will resume Tuesday.



Other news